Past education inequality studies found that within-groups inequality was higher than that of between-groups. This situation has resulted in neglect of the effect of between-groups inequality which shows the disparity among groups. This paper aims to investigate both within- and between-group inequality, besides interpreting education inequality among individuals. Based on a case study in Sabah, Malaysia, this study measures education inequality through analysis of standard public examination results via the Theil index. Results show that education inequality in urban areas tends to be lesser than in rural areas, with students in the former showing better results in their examinations. It is noted that the overall level of education inequality as well as inequality for urban and rural areas in Sabah decreased between 2009 and 2013. The irony, however, is that although the education inequality in these two locales was lesser, the inequality among groups has begun to diverge.